205 U.S.

236
27 S.Ct. 469
51 L.Ed. 784

ROCHESTER RAILWAY COMPANY, Plff. in Err.,

v.
CITY OF ROCHESTER.
No. 156.
Argued January 14, 15, 1907.
Decided March 25, 1907.

The defendant in error brought an action against the plaintiff in error, a

street surface railroad corporation, hereinafter called the Rochester
Railroad, to recover $18,274.02, the expense of making new pavements of
two streets within the space between the tracks, the rails of the tracks, and
2 feet in width outside the tracks of the railroad. The action was brought
under 98 of chapter 39 of the General Laws of New York, which was
enacted in 1890, and is as follows:
Every street surface railroad corporation, so long as it shall continue to use
any of its tracks in any street, avenue, or public place, in any city or
village, shall have and keep in permanent repair that portion of such street,
avenue, or public place between its tracks, the rails of its tracks, and 2 feet
in width outside of its tracks, under the supervision of the proper local
authorities, and whenever required by them to do so, and in such manner
as they may prescribe. In case of the neglect of any such corporation to
make pavements or repairs after the expiration of thirty days' notice to do
so the local authorities may make the same at the expense of such
corporation.
The Rochester Railroad was incorporated on February 25, 1890, under a
law of New York enacted May 6, 1884. New York laws 1884, chap. 252.
That law authorized the formation of street surface railroad corporations
and provided that they should 'have all the powers and privileges granted,
and be subject to all the liabilities imposed, by this act.' Among the
liabilities was that imposed by 9 of the act, which is as follows:
'Every such corporation incorporated under, or constructing, extending, or

operating a railroad constructed or extended under, the provisions of this

act, within the incorporated cities and villages of this state, shall also,
whenever and as required, and under the supervision of the proper local
authorities, have and keep in permanent repair the portion of every street
and avenue between its tracks, the rails of its tracks, and a space of 2 feet
in width outside and adjoining the outside rails of its track or tracks, so
long as it shall continue to use such tracks, so constructed, under the
provisions of this act. In case of the neglect of such corporations to make
such pavement or repairs the local authorities may make the same at the
expense of such corporation after the expiration of thirty days' notice to do
so.'
Section 18 of the act provides that 'all acts and parts of acts, whether
general or special, inconsistent with this act, are hereby repealed, but
nothing in this act shall . . . interfere with or repeal or invalidate any rights
heretofore acquired under the laws of this state by any horse railroad
company, or affect or repeal any right of any existing street surface
railroad company to construct, extend, operate, and maintain its road in
accordance with the terms and provisions of its charter and the acts
amendatory thereof.'
The Rochester Railroad Company was incorporated for the purpose of
acquiring the property of the Rochester City & Brighton Railroad
Company, hereinafter called the Brighton Railroad. The Brighton Railroad
was incorporated March 5, 1868, under a general law of the state of New
York. Laws of 1850, chap. 140. That law contained no provision
respecting the repairs of streets, and, differences having arisen between
the Brighton Railroad and the city, as to the extent of the burden of such
repairs properly to be borne by the railroad, they joined in an application
to the legislature for the enactment of a law which should regulate that
and other subjects. Such a law was enacted February 27, 1869, and its 5th
section was as follows:
'Said company shall put, keep, and maintain the surface of the streets
inside the rails of its tracks in good and thorough repair, under the
direction of the committee on streets and bridges of the common council
of said city of Rochester; but, whenever any of said streets are, by
ordinance or otherwise, permanently improved, said company shall not be
required to make any part or portion of such improvement, or bear any
part of the expense thereof, but it shall make its rails in such street or
streets conform to the grade thereof.' [Laws of 1869, chap. 34.]
On the 25th day of February, 1890, the Brighton Railroad duly executed

and delivered a lease of its property, franchises, rights, and privileges, for
the unexpired term of its charter, to the Rochester Railroad, which
accepted the lease and took possession of the property. Subsequently, in
the same year, the Rochester Railroad acquired the entire capital stock of
the Brighton Railroad. The acquisition of stock was in pursuance of the
authority contained in chapter 254 of the Laws of New York of 1867,
which, as amended by chapter 503 of the Laws of 1879, is as follows:
'Any railroad corporation created by the laws of this state, or its
successors, being the lessee of the road of any other railroad corporation,
may take a surrender or transfer of the capital stock of the stockholders, or
any of them, in the corporation whose road is held under lease, and issue
in exchange therefor the like additional amount of its own capital stock at
par, or on such other terms and conditions as may be agreed upon between
the two corporations; and whenever the greater part of the capital stock of
any such corporation shall have been so surrendered or transferred, the
directors of the corporation taking such surrender or transfer shall
thereafter, on a resolution electing so to do, to be entered on their minutes,
because ex officio the directors of the corporation whose road is so held
under lease, and shall manage and conduct the affairs thereof, as provided
by law; and whenever the whole of the said capital stock shall have been
so surrendered or transferred, and a certificate thereof filed in the office of
the secretary of state, under the common seal of the corporation to whom
such surrender or transfer shall have been made, the estate, property,
rights, privileges, and franchises or the said corporation whose stock shall
have been so surrendered or transferred shall thereupon vest in and be held
and enjoyed by the said corporation to whom such surrender or transfer
shall have been made, as fully and entirely, and without change or
diminution, as the same were before held and enjoyed, and be managed
and controlled by the board of directors of the said corporation to whom
such surrender or transfer of the said stock shall have been made, and in
the corporate name of such corporation. The rights of any stockholder not
so surrendering or transferring his stock shall not be in any way affected
hereby, nor shall existing liabilities or the rights of creditors of the
corporation, where stock shall have been so surrendered or transferred, be
in any way affected or impaired by this act.'
Subsequently the Rochester Railroad duly obtained permission to convert
the road into an electric trolley road, expended large sums of money in
doing so, and, in the acquisition of the stock of the Brighton Railroad and
the conversion of its road into an electric road, relied upon the provisions
of the act of 1869 as a contract exempting it, with respect to the streets
covered by the tracks of the Brighton Railroad, from other street repairs

than those therein described. The city acquiesced in this view until
October, 1898, when, upon the suit of an owner of adjoining property, the
court of appeals held that, under 9 of the act of 1884, and 98 of chapter
39 of the General Laws, which were regarded as substantially the same,
the Rochester Railroad was bound to bear the expense of a new pavement
on* the location acquired from the Brighton Railroad. Conway v.
Rochester, 157 N. Y. 33, 51 N. E. 395. Subsequently, the city repaved
two streets which were within the location acquired and operated by the
Brighton Railroad, prior to the passage of the act of 1884, and, in
obedience to the decision in the Conway Case, assessed against the
Rochester Railroad its share of the expense of pavement, and brought this
action to recover the amount of the assessment. It was set up in defense of
the action that, by the act of 1869, the state of New York had entered into
an inviolable contract with the Brighton Railroad, exempting it from the
expense of pavement, that the contract had passed with the property of the
Brighton Railroad to the Rochester Railroad, and that the assessment was
in violation of the Constitution of the United States. The contentions of
the Rochester Railroad were denied by the court of appeals of New York
(182 N. Y. 116, 70 L.R.A. 773, 74 N. E. 953), which held, first, that the
statute mentioned did not constitute a contract between the state and the
railroad company, and, second, that if it did, the exemption granted by the
statute was personal to the Brighton Railroad, and did not pass to the
Rochester Railroad. The case was remanded to the supreme court and a
judgment entered pursuant to the remittitur from the court of appeals, and
by writ of error that judgment is brought here for review.
Messers. Charles J. Bissell, William C. Trull, and Joseph S. Clark for
plaintiff in error.
[Argument of Counsel from pages 241-243 intentionally omitted]
Messrs. William W. Webb and Benjamin B. Cunningham for defendant in
error.
Statement by Mr. Justice Moody:
[Argument of Counsel from pages 243-245 intentionally omitted]
Mr. Justice Moody, after making the foregoing statement, delivered the
opinion of the court:

By the judgment of the highest court of the state of New York, the city of

Rochester was allowed to recover from the Rochester Railroad, a street surface
railroad corporation, the cost of laying new pavements on the parts of two
streets which lay between the tracks, the rails of the tracks, and 2 feet outside of
the tracks of the railroad. This recovery was had under a statute of New York
which required such railroads to keep that part of the street over which their
tracks ran in permanent repair. The requirement of permanent repair includes
the duty of laying new pavements. Conway v. Rochester, 157 N. Y. 33, 51 N.
E. 395.
2

The Rochester Railroad, not denying its liability in ordinary cases to bear the
expense of paving, asserts that, with respect to the two streets in question, it
was exempted from that burden by contract with the state of New York, made
with its predecessor in title, the Brighton Railroad, and transferred to it with the
title to the property of that railroad. The contract relied upon is found in a law
enacted in 1869, for the benefit of the Brighton Railroad, which relieved that
road from the burden of pavement of any part of the streets in which its tracks
were situated. The Rochester Railroad claims that the law of New York, so far
as that law imposes upon it the cost of the pavement of the streets in question,
was in violation of that provision of the Constitution of the United States which
forbids a state to pass any law impairing the obligation of contracts.

The Brighton Railroad was incorporated in 1862, under the general law of
1850, which contained no provision with respect to the railroad's share of street
repairs. Until the enactment of the law of 1884, under which the Rochester
Railroad was subsequently incorporated, there was no general law regulating
the apportionment between street railroads and municipalities of the expense of
such repairs, and the question was determined in individual cases either by
agreement or a special law. Differences having arisen between the Brighton
Railroad and the city of Rochester as to the share of the expense of street repair
which ought to be borne by the railroad, they joined in a request for legislation
which would settle this and other disagreements. In response to that request the
law of 1869 was enacted. The 5th section of the law, after providing that the
railroad should put and keep the surface and street inside of the rails of its
tracks in repair, enacts that: 'Whenever any of said streets are, by ordinance or
otherwise, permanently improved, said company shall not be required to make
any part or portion of such improvement, or bear any part of the expense
thereof.'

This law, obviously, as held by the court of appeals, exempted the railroad from
the expense of new pavements, which is the expense sought to be recovered in
this action. This was the effect conceded to the statute by the city for the whole
time during which the railroad property was owned and operated by the

Brighton Railroad, and even after it parted with the property, and until the
decision in Conway v. Rochester, supra, in 1898. Whether this statute was a
contract between the state of New York and the Brighton Railroad, inviolable
by the Federal Constitution, and if so, whether its benefits have been waived or
it has been lawfully modified or repealed by virtue of the powers reserved by
the Constitution or laws of New York, are questions which have been much
argued at the bar. We do not deem it necessary in this case to decide those
questions, and therefore put out of view many facts found in the record which
were deemed by both parties to be relevant to them. We assume, for the
purpose of our decision, that there was a contract exempting the Brighton
Railroad from the expense of street pavements, and that the contract could not
constitutionally be impaired by the state of New York, and that its benefits have
not been waived.
5

It becomes, therefore, necessary to inquire whether the contract has been

transferred with the property of the Brighton Railroad to th Rochester Railroad,
the plaintiff in error.

The Rochester Railroad was incorporated for the purpose of acquiring the
property of the Brighton Railroad, which was accomplished by a lease of the
property, franchises, rights, and privileges of the Brighton Railroad, followed
by the purchase of its capital stock. This was done under the authority of a
statute which provided that a railroad corporation, being the lessee of the
property of another railroad corporation, might acquire the whold of the capital
stock of the latter, and in such a case its 'estate, property, rights, privileges, and
franchises should vest in and be held and enjoyed by' the purchasing
corporation. It is contended that the effect of the transfer under this law is to
vest in the Rochester Railroad the exemption from the expense of street
pavement which the Brighton Railroad enjoyed through the contract with the
state of New York. This contention presents the question to be decided.

This court has frequently had occasion to decide whether an immunity from the
exercise of governmental power which has been granted by contract to one has,
by legislative authority, been vested in or transferred to another, and in the
decisions certain general principles, which control in the determination of the
case at bar, have been established. Although the obligations of such a contract
are protected by the Federal Constitution from impairment by the state, the
contract itself is not property, which, as such, can be transferred by the owner to
another, because, being personal to him with whom it was made, it is incapable
of assignment. The person with whom the contract is made by the state may
continue to enjoy its benefits unmolested as long as he chooses, but there his
rights end, and he cannot, by any form of conveyance, transmit the contract or

its benefits to a successor. Morgan v. Louisiana, 93 U. S. 217, 23 L. ed. 860;

Wilson v. Gaines, 103 U. S. 417, 26 L. ed. 401; Louisville & N. R. Co. v.
Palmes, 109 U. S. 244, 27 L. ed. 922, 3 Sup. Ct. Rep. 193; Picard v. East
Tennessee, V. & G. R. Co. 130 U. S. 637, 32 L. ed. 1051, 9 Sup. Ct. Rep. 640;
St. Louis & S. F. R. Co. v. Gill, 156 U. S. 649, 39 L. ed. 567, 15 Sup. Ct. Rep.
484; Norfolk & W. R. Co. v. Pendleton, 156 U. S. 667, 39 L. ed. 574, 15 Sup.
Ct. Rep. 413. But the state, by virtue of the same power which created the
original contract of exemption, may, either by the same law or by subsequent
laws, authorize or direct the transfer of the exemption to a successor in title. In
that case the exemption is taken, not by reason of the inherent right of the
original holder to assign it, but by the action of the state in authorizing or
directing its transfer. As in determining whether a contract of exemption from a
governmental power was granted, so in determining whether its transfer to
another was authorized or directed, every doubt is resolved in favor of the
continuance of the governmental power, and clear and unmistakable evidence
of the intent to part with it is required.
8

Keeping these fundamental principles steadily in mind, we proceed to inquire

whether the state of New York has authorized or directed the transfer from the
Brighton Railroad to the Rochester Railroad of the contract of exemption. A
legislative authorization of the transfer of 'the property and franchises' (Morgan
v. Louisiana, and Picard v. East Tennessee, V. & G. R. Co. ubi supra); of 'the
property' (Wilson v. Gaines and Louisville & N. R. Ct. v. Palmes, ubi supra); of
'the charter and works' (Memphis & L. R. R. Co. v. Railroad Comrs. (Memphis
& L. R. R. Co. v. Berry), 112 U. S. 609, 28 L. ed. 837, 5 Sup. Ct. Rep. 299); or
of 'the rights of franchise and property' (Norfolk & W. R. Co. v. Pendleton, ubi
supra),is not sufficient to include an exemption from the taxing or other
opwer of the state, and it cannot be contended that the word 'estate' has any
larger meaning. It is, however, argued that the word 'privileges' is sufficiently
broad to embrace within its meaning such an exemption, and that, when it is
added to the other words, the legislative intent to transfer the exemption is
clearly manifested, and that the words of the law under consideration, 'the
estate, property, rights, privileges, and franchises,' indicate the purpose to vest
in the purchasing corporation every asset of the selling corporation which is of
conceivable value. There is authority sustaining this position, which cannot be
set aside without examination.

In the case of Humphrey v. Pegues, 16 Wall. 244, 21 L. ed. 326, it appeared

that the charter of the Northeastern Railroad Company, granted by the state of
South Carolina, originally contained no exemption from taxation, but that, by
amendment to the charter, some years later, the real estate and stock of the
company were exempted from all taxation during the continuance of its charter.

Subsequently the legislature granted the charter of the Cheraw & Darlington
Railroad Company, and provided that 'all the powers, rights, and privileges
granted by the charter of the Northeastern Railroad Company are hereby
granted to the Cheraw & Darlington Railroad Company.' The state of South
Carolina attempted to tax the stock and property of the Cheraw & Darlington
Railroad Company, and the validity of that taxation was the question in the
case. The court held that the powers, rights, and privileges granted to the
Cheraw & Darlington Railroad Company were those contained in the
amendment of the charter, as well as those contained in the original charter, and
said, by Mr. Justice Hunt: 'All the 'privileges,' as well as powers and rights, of
the prior company, were granted to the latter. A more important or more
comprehensive privilege than a perpetual immunity from taxation can scarcely
be imagined. It contains the essential idea of a peculiar benefit or advantage, of
a special exemption from a burden falling upon others.' Upon this reasoning it
was held that the stock and real estate of the Cheraw & Darlington Railroad
Company were exempt from taxation. See Gunter v. Atlantic Coast Line R. Co.
200 U. S. 273, 50 L. ed. 477, 26 Sup. Ct. Rep. 252.
10

In Chesapeake & O. R. Co. v. Virginia, 94 U. S. 718, 24 L. ed. 310, it was said

that an act conferring upon a railroad corporation 'the benefits of the charter' of
another corporation which had an immunity from taxation, and 'the rights,
privileges, franchises, and property' of another corporation, which, when
formed, would have the 'rights, privileges, and franchises and property' of the
corporation holding the immunity, was sufficient to transfer the immunity from
taxation. But this expression of opinion was unnecessary to the decision of the
case, which merely decided that where a railroad corporation acquired the
property of another railroad corporation, to which was attached an immunity
from taxation, that immunity did not extend beyond the property thus acquired.
In Southwestern R. Co. v. Georgia, 92 U. S. 576, note, 23 L. ed. 762, where a
statute allowed the Muscogee Railroad to unite with the Southwestern Railroad
into one company, under the charter of the latter, and it was provided that 'all
the rights, privileges, and property [of the Muscogee Railroad Company] shall
be part and parcel of the Southwestern Railroad,' it was held that the immunity
from taxation enjoyed by the Muscogee Railroad passed with its property to the
Southwestern Railroad.

11

In Tennessee v. Whitworth, 117 U. S. 139, 29 L. ed. 833, 6 Sup. Ct. Rep. 649,
it was held that a statute conferring upon a railroad corporation 'all the rights,
powers, and privileges' of another railroad corporation, and 'all the powers and
privileges' of a third railroad corporation, included the immunities from
taxation enjoyed respectively by the latter corporations, the ground of the
decision being that an exemption from taxation is, in the common acceptation

of the term, a privilege.

12

If the authority of these four cases, supported by some dicta which need not be
cited, remained unimpaired, it would justify the opinion that a legislative
transfer of the 'privileges' of corporation includes an exemption from the taxing
or other governmental power granted by a contract with the state. But other and
later cases have essentially modified the rule which may be deduced from them.

13

In the case of the Chesapeake & O. R. Co. v. Miller, 114 U. S. 176, 29 L. ed.
121, 5 Sup. Ct. Rep. 813, it was held that the foreclosure of a mortgage on
railroad property under the provisions of a statute which authorized the
purchaser under a foreclosure sale to become a corporation, and provided that it
should succeed to all such franchises, rights, and privileges' as were possessed
by the mortgagor company, did not vest in the purchasing corporation an
immunity from taxation.

14

In Picard v. East Tennessee, V. & G. R. Co. 130 U. S. 637, 32 L. ed. 1051, 9

Sup. Ct. Rep. 640, Mr. Justice Field, in delivering the opinion of the court,
said: 'The later, and, we think, the better, opinion, is that unless other
provisions remove all doubt of the intention of the legislature to include the
immunity in the term 'privileges,' it will not be so construed. It can have its full
force by confining it to other grants to the corporation.

15

In Wilmington & W. R. Co. v. Alsbrook, 146 U. S. 279, 36 L. ed. 972, 13 Sup.

Ct. Rep. 72, Mr. Chief Justice Fuller, in delivering the opinion of the court,
said, on page 297, L. ed. page 979, Sup. Ct. Rep. page 77: 'We do not deny that
exemption from taxation may be construed as included in the word 'privileges,'
if there are other provisions removing all doubt of the intention of the
legislature in that respect.'

16

In Keokuk & W. R. Co. v. Missouri, 152 U. S. 301, 38 L. ed. 450, 14 Sup. Ct.
Rep. 592, Mr. Justice Brown, in delivering the opinion of the court, said:
'Whether, under the name 'franchises and privileges,' an immunity from
taxation would pass to the new company, may admit of some doubt, in view of
the decisions of this court, which, upon this point, are not easy to be reconciled.'

17

These conflicting views were before the court in Phoenix F. & M. Ins. Co. v.
Tennessee, 161 U. S. 174, 40 L. ed. 660, 16 Sup. Ct. Rep. 471. The plaintiff in
error in that case claimed to have an immunity from taxation by virtue of a
provision in its charter granting it 'all the rights and privileges' of the De Soto
Insurance Company, which had an immunity from taxation by virtue of a

provision in its charter granting it 'all the rights, privileges, and immunities' of
the Bluff City Insurance Company, whose charter contained an expressed
immunity from taxation. Mr. Justice Peckham, in delivering the opinion of the
court, stated the question for decision in these words: 'Is immunity from
taxation granted to plaintiff in error under language which grants 'all the rights
and privileges' of a company which has such immunity?' Much significance was
given to the fact that the word 'immunity,' which clearly includes an exemption,
was used in the charter of the De Soto company, and not used in the charter of
the plaintiff in error, granted seven years later. But the decision was not rested
on this circumstance, although the omission was thought to cast a grave doubt
upon the plaintiff's claim. The opinion reviews all the cases, cites the foregoing
quotations from the opinions of Mr. Justice Brown, Mr. Justice Field, and of
the Chief Justice, and, after saying: 'There must be other language than the
mere word 'privilege,' or other provisions in the statute removing all doubt as to
the intention of the legislature before the exemption will be admitted,'
concludes that: 'If this were an original question we should have no hesitation
in holding that the plaintiff in error did not acquire the exemption from taxation
claimed by it, and we think at the present time the weight of authority, as well
as the better opinion, is in favor of the same conclusion which we should
otherwise reach.'
18

In Gulf & S. I. R. Co. v. Hewes, 183 U. S. 66, 46 L. ed. 86, 22 Sup. Ct. Rep.
26, Mr. Justice Brown, in delivering the opinion of the court, said, citing this
case as authority: 'The better opinion is that a subrogation to the 'rights and
privileges' of a former corporation does not include an immunity from taxation.'

19

We think it is now the rule, notwithstanding earlier decisions and dicta to the
contrary, that a statute authorizing or directing the grant or transfer of the
'privileges' of a corporation which enjoys immunity from taxation or regulation
should not be interpreted as including that immunity. We, therefore, conclude
that the words 'the estate, property, rights, privileges, and franchises' did not
embrace within their meaning the immunity from the burden of paving enjoyed
by the Brighton Railroad Company. Nor is there anything in this, or any other
statute, which tends to show that the legislature used the words with any larger
meaning than they would have standing alone. The meaning is not enlarged, as
faintly suggested, by the expression in the statute that they are to be held by the
successor 'fully and entirely, and without change and diminution,'words of
unnecessary emphasis, without which all included in 'estate, property, rights,
rivileges, and franchises' would pass, and with which nothing more could pass.
On the contrary, it appears, as clearly as it did in the Phoenix Fire Insurance
Company Case, that the legislature intended to use the words 'rights, franchises,
and privileges' in the restricted sense. The law under which this transfer was

made was enacted in 1867 and amended in 1879. In 1869 an act was passed
authorizing the merger and consolidation of railroad corporations (chap. 917,
Laws of 1869), which provided that, upon the consolidation, 'all and singular
the rights, privileges, exemptions, and franchises should be transferred to the
new corporation.' In 1876 an act was passed (chap. 446, Laws of 1876) which
authorized the purchasers of the rights, privileges, and franchises of railroad
corporations (except street railroad corporations) under a foreclosure sale to
become a corporation, and thereupon have 'all the franchises, rights, powers,
privileges, and immunities' of the corporation whose property was sold. The
omission in the statute under consideration of the words 'exemptions' or
'immunities,' either of which would be apt to transfer the immunity claimed, is
significant, in view of the fact that each of these words was employed by the
legislature about the same time in other statutes dealing with the transfer of
corporate property, and raises a doubt of the intention of the legislature, which,
in cases of the interpretation of a statute claimed to devest the state of a
governmental power, is equivalent to a denial.
20

The conclusion that the exemption of the Brighton Railroad did not accompany
the transfer of its property to the Rochester Railroad is reached by another and
entirely independent course of reasoning, based upon a consideration of the law
under which the Rochester Railroad was incorporated. That was the general
incorporation law of 1884. Every corporation incorporated under it was made
'subject to all the liabilities imposed by the act' ( 1), and directed to keep the
street surface about and between its tracks 'in permanent repair' ( 9), which, as
held by the state court, includes the duty of laying such pavement as is in
controversy here. We follow the construction by that court of 9 so far as it
holds that that section applies to all tracks, whether constructed under this law
or any other law, owned and operated by a corporation incorporated under it.
Whether the section applies, or constitutionally can apply, to a corporation not
deriving its powers from the act of 1884, in respect of tracks not constructed
under its provisions, it is not necessary for us to consider. There may have been
a saving of the rights of such corporations under 18. That question would be
presented if the Brighton Railroad, instead of a successor in title, were claiming
an exemption. Here a corporation deriving its right to exist under the act of
1884 is asserting an exemption from a duty imposed upon it by the law which
created it. The authorities are numerous and conclusive that no corporation can
receive, by transfer from another, an exemption from taxation or governmental
regulation which is inconsistent with its own charter or with the Constitution or
laws of the state then applicable; and this is true, even though, under legislative
authority, the exemption is transferred by words which clearly include it. Trask
v. Maguire, 18 Wall. 391, 21 L. ed. 938; Shields v. Ohio. 95, U. S. 319, 24 L.
ed. 357; Maine C. R. Co. v. Maine, 96 U. S. 499, 24 L. ed. 836; Atlantic & G.

R. Co. v. Georgia, 98 U. S. 359, 25 L. ed. 185; Louisville & N. R. Co. v.

Palmes, 109 U. S. 244, 27 L. ed. 922, 3 Sup. Ct. Rep. 193; Memphis & L. R. R.
Co. v. Railroad Comrs. (Memphis & L. R. R. Co. v. Berry) 112 U. S. 609, 28
L. ed. 837, 5 Sup. Ct. Rep. 299; St. Louis, I. M. & S. R. Co. v. Berry, 113 U. S.
465, 28 L. ed. 1055, 5 Sup. Ct. Rep. 529; Keokuk & W. R. Co. v. Missouri, 152
U. S. 301, 38 L. ed. 450, 14 Sup. Ct. Rep. 592; Norfolk & W. R. Co. v.
Pendleton, 156 U. S. 667, 39 L. ed. 574, 15 Sup. Ct. Rep. 413; Yazoo & M.
Valley R. Co. v. Adams, 180 U. S. 1, 45 L. ed. 395, 21 Sup. Ct. Rep. 240;
Grand Rapids & I. R. Co. v. Osborn, 193 U. S. 17, 48 L. ed. 598, 24 Sup. Ct.
Rep. 310; San Antonio Traction Co. v. Altgelt, 200 U. S. 304, 50 L. ed. 491, 26
Sup. Ct. Rep. 261.
21

The principle governing these decisions, so plain that it needs no reasoning to

support it, is that those who seek and obtain the benefit of a charter of
incorporation must take the benefit under the conditions and with the burdens
prescribed by the laws then in force, whether written in the Constitution, in
general laws, or in the charter itself. The Rochester Railroad, therefore, having
accepted its charter under a law which imposed upon it the duty of laying
pavements, is bound to perform that duty, even in respect of tracks which, while
owned by a predecessor in title, would have been exempt.

22

The foregoing considerations would be conclusive of the case were it not that
the plaintiff in error takes another position, which, if tenable, would avoid the
result reached by either course of reasoning. It is insisted that this is not a case
of transfer of an exemption; that the rules governing transfer are not applicable
here; that the Brighton Railroad has not ceased to exist as a corporation; that it
has been merely joined by merger with the Rochester Railroad, which controls
it by stock holdings, and operates it by virtue of its franchises; and that,
therefore, the Rochester Railroad may claim and enjoy the exemption of the
Brighton Railroad in its behalf in respect of its property. In support of this view
counsel cite Tomlinson v. Branch, 15 Wall. 460, 21 L. ed. 189; Central R. &
Bkg. Co. v. Georgia, 92 U. S. 665, 23 L. ed. 757; Tennessee v. Whitworth, ubi
supra. These cases hold that where corporations are united in such manner that
one continues to exist as a corporation, owning and operating its property, by
virtue of its own charter, the corporation thus continuing to exist still holds its
immunities and exemptions in respect of the property to which they apply. But
the cases have no application here. It may well be that a proceeding for
condemnation of property, begun by the Brighton Railroad, would not abate by
reason of its consolidation with the Rochester Railroad, as held in [Re New
York Elev. R. Co.] 43 N. Y. S. R. 651, 17 N. Y. Supp. 778, Affirmed in 133 N.
Y. 690, 31 N. E. 627. An examination, however, of the statute under which the
union of the two corporations was made, and the transactions by which the

union was accomplished, shows that the Brighton Railroad has ceased to exist
as a corporation. The Rochester Railroad first took a lease of the Brighton
Railroad, apparently for the purpose of bringing itself within the provisions of
the act of 1879. Then all the stock of the latter corporation was acquired by
exchange of shares of stock of the former corporation. Then a certificate of the
transfer of stock was filed with the secretary of state. Thereupon, by operation
of the law, the 'estate, property, rights, privileges, and franchises' of the
Brighton Railroad vested in the Rochester Railroad, to be thereafter controlled
by the Rochester Railroad in its own corporate name. The law does not
expressly dissolve the selling corporation, but it leaves it without stock,
officers, property, or franchises. A corporation without shareholders, without
officers to manage its business, without property with which to do business, and
without the right lawfully to do business, is dissolved by the operation of the
law which brings this condition into existence. Maine C. R. Co. v. Maine;
Keokuk & W. R. Co. v. Missouri; and Yazoo & M. Valley R. Co. v. Adams,
ubi supra.
23

The judgment of the Supreme Court of New York is, therefore, affirmed.

24

Mr. Justice White concurs in the result.